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Several small businesses protest the terms of request for proposals (RFP) No. DABL01-03-R-1001, issued as a small business set-aside by the Department of the Army, Information Technology, E-Commerce and Commercial Contracting Center, for travel services. They protest that the solicitation places undue risk and burden on the offerors, that the agency has not disclosed sufficient information to enable offerors to intelligently prepare proposals, that the requirements were improperly bundled into one large multi-award procurement, that the grouping of the travel locations for each award was unreasonable, that the evaluation scheme did not sufficiently detail how awards would be made, that the agency improperly failed to reopen the competition after issuing a material amendment, and that the price evaluation scheme was defective.

1. Attorneys' requests for admission to GAO protective order are granted, notwithstanding agency's objections, where the attorneys have provided evidence that they are not competitive decisionmakers for a client (or another relevant firm), which has not been rebutted by the agency.

2. Solicitation for a fixed-priced contract to provide travel management services which required contractors to use developmental software did not place undue risks on offerors where the agency identified the performance uncertainties and provided sufficient information to allow offerors to intelligently prepare their proposals.

3. Solicitation contemplating multiple awards to small businesses for travel management services, which grouped the 87 nationwide locations into 28 travel areas, did not constitute improper bundling in violation of the Competition in Contracting Act of 1984, where the procurement approach was reasonably required to satisfy the agency's legitimate needs.

4. Under a solicitation contemplating multiple awards for travel management services in 28 travel areas, agency, which provided general advice to the offerors as to what it would consider in deciding how many travel areas an offeror, apparently in line for award under these travel areas, would be capable of performing, is not required to furnish further precise details about how it would perform this aspect of the evaluation.

5. Where an amendment to a solicitation, issued after proposals were received, significantly changed the offered contractual relationship of the parties by shifting significant risk to the government, the agency was required to reopen the competition to firms that did not submit proposals because the record evidenced that some firms may not have submitted proposals because of this risk.

6. Price evaluation scheme for travel management procurement does not provide a reasonable basis for comparing the relative costs of the proposals, where prices for categories of services which will not be provided are part of the scheme.

DECISION

Several small businesses protest the terms of request for proposals (RFP) No. DABL01-03-R-1001, issued as a small business set-aside by the Department of the Army, Information Technology, E-Commerce and Commercial Contracting Center, for travel services. They protest that the solicitation places undue risk and burden on the offerors, that the agency has not disclosed sufficient information to enable offerors to intelligently prepare proposals, that the requirements were improperly bundled into one large multi-award procurement, that the grouping of the travel locations for each award was unreasonable, that the evaluation scheme did not sufficiently detail how awards would be made, that the agency improperly failed to reopen the competition after issuing a material amendment, and that the price evaluation scheme was defective.

We sustain the protests in part and deny them in part.

BACKGROUND

This procurement is part of the Department of Defense's (DoD) effort to reengineer the DoD travel process. DoD identified this process during the National Performance Review in 1993 as being in need of reengineering because it was fragmented, inefficient, expensive to administer, and occasionally an impediment to mission accomplishment. In 1995, DoD established what became the Defense Travel System Program Management Office (DTS/PMO), whose mission was to acquire travel services DoD-wide, and support mission requirements, reduce costs, and provide superior customer service.[2] The DTS/PMO initiated the Defense Travel System Program to procure a software-based travel system, designated the DTS. DoD envisioned the DTS as a general support system designed to make business travel quicker, easier, and more efficient by providing automated commercial and government travel support services to DoD travelers. See DoD Inspector General Report No. D-2002-124 at 1.

In May 1998, the DTS/PMO, through the Military Traffic Management Command, contracted with TRW, Inc. to design and deploy the DTS.[3] The original contract called for deploying the DTS to 11,000 sites worldwide within 120 days of the effective date of the contract with completion approximately 38 months later (April 2002). However, the DTS/PMO discovered that the travel system was more cumbersome than anticipated, and that the planned commercial-off-the-shelf product would require extensive modification and development to meet DoD's requirements. Id. at 6-7.

The DTS/PMO now anticipates that it will take until 2006 to obtain total functionality of the system, including integrating the common user interface and the DoD accounting and disbursing systems and the engineering support necessary to implement the system development of the DTS. Hearing exh. No. 5, DTS Command Briefing, at 31. The DTS/PMO has also reduced the DTS deployment plan to include only approximately 260 travel sites; the revised deployment schedule included initially fielding the DTS to a relatively small number (10) of pilot sites during 2002, and to approximately 250 high-volume travel sites from 2003 to 2006. DoD Inspector General Report No. D-2002-124 at 7. The DTS/PMO also states that the DTS software will undergo evolutionary development to add features and capabilities, and to address problems in earlier versions; the successive versions bear the names of United States presidents. The current schedule contemplates release of a Jefferson version in March 2003, a Madison version in January 2004, a Monroe version in January 2005, and an Adams version in January 2006.[4]See Hearing exh. No. 5, DTS Command Briefing, at 31. Up to this point, the DTS has only been deployed at pilot sites within DoD utilizing the Washington and Adams versions of the software.

Currently, DoD contracts with CTOs, such as the protesters or large business travel companies, to meet its travel service needs primarily through traditional methods. Traditional travel services involve the traveler (or travel clerk) calling a travel agent at the CTO, orally describing the travel requirements, and working with the travel agent to make airline, hotel, and rental car reservations. To effectuate the service, the travel agent is required to obtain certain required information regarding the traveler, such as name, address, phone number, travel preferences, and credit card information. This information is utilized by the travel agent to develop a Passenger Name Record (PNR) in the Global Distribution System (GDS). The GDS consists of several databases utilized by the CTO industry to book reservations with airline, hotel and rental car vendors.[5] The GDS is used to book the flight, hotel, and or rental car, and to decrement the appropriate vendor's inventory. The travel agent then completes the process by issuing a ticket or confirmation number.[6]

In contrast, the DTS software is designed to permit the DoD traveler or travel clerk to develop a PNR that is electronically passed through a contractor-operated PNR gateway directly to the various GDS databases. In developing the PNR, the traveler or travel clerk has the ability to directly access the information related to airline flights, hotels, and car rentals, and to make the reservations in the GDS, tasks currently being done by the CTOs using the traditional methods. The PNR is then held within the particular GDS in an electronic mailbox called a queue, which is generally used by the CTO only for purpose of fulfillment. See Agency Hearing Comments at 2-3.

DoD states that automating the travel process should result in substantial savings to the government.[7] In this regard, DoD believes that the CTOs should have lower labor costs because they generally need only assist in the fulfillment of travel ordered on the PNR, instead of performing traditional travel agent services, which entail manually interfacing with the system to add other information or take other actions. DoD asserts that this should cause a reduction in the CTOs' transaction fees charged the government.[8] In addition to allowing the traveler or travel clerk to book travel, the DTS is expected to also automate other aspects of the travel process, including travel reimbursement, accounting, and record keeping.[9]

SOLICITATION

As part of the effort to deploy the DTS, the Army issued the RFP on November 22, 2002, as a small business set-aside to acquire official travel management and related additional services from CTOs on a point-of-sale, transaction-fee basis. The RFP contemplated multiple awards of fixed-price, indefinite-delivery, indefinite-quantity, task order contracts (with one cost'reimbursable item) for a base period of 2 years, with three 1-year option periods. The RFP, as amended,[10] broke out the travel services requirements into 28 distinct travel areas, each of which contained one or more travel locations, with an overall total of 89 locations.[11]

The RFP's statement of work (SOW) advised that travel management services to support DoD travelers whose duty stations are within the travel area(s) awarded to the CTO contractor were to include both traditional methods and automated methods, and that automated travel management services were required to be performed exclusively through the use of the DTS software. RFP amend. 10, C.1.1., C.1.2. In addition, the SOW required the contractor to perform management information system (MIS) reporting requirements for all travel services, including centrally billed account (CBA) reconciliation, STATCO, and TRIP$.[12] RFP amend. 10, C.1.4, C.4.6. The SOW stated in this regard:

CBA reconciliation functionality is planned to be release[d] in July 2003 for those transactions facilitated through DTS. Once this functionality is in place, the CTO will no longer be required to provide that service for transactions process[ed] via DTS. Until that time for DTS facilitated transactions and for traditional travel services the Contractor is required to perform CBA reconciliation. RFP amend. 10, C.4.6.

The RFP provided for multiple awards by travel area.[13] There were several go/no-go criteria that proposals had to satisfy in order to be considered for award. Awards would then be made on a best value basis, considering the technical, performance risk, and price evaluation factors. The technical factor was composed of two subfactors: understanding of the requirements and feasibility of approach.[14] Performance risk and price did not have subfactors.[15] Under performance risk, the government will conduct an assessment based on the quality, relevancy, and currency of the offeror's past performance. RFP amend. 8, M.4.2.1. The technical factor was said to be more important than the price factor, which was in turn more important than the performance risk factor. The RFP explained that

[f]or all offerors that pass the initial go/no go evaluation, the Government will proceed to conduct a best value proposal evaluation that will not use a predefined formula in the selection decision process for each Travel Area, instead, the source selection process will identify those proposals for each Travel Area that are determined to be the most beneficial to the Government with appropriate consideration given to the three (3) factors. RFP amend. 8, M.1.1.

The price evaluation scheme in the RFP required offerors to propose fees for performing the various services required by the contract. Offerors were specifically required to propose point-of-sale transaction fees for travel management services for air/rail transactions, fees to perform CBA reconciliation, and transaction fees to perform non-air transactions. All of these proposed fees would be considered in the price evaluation scheme.[16] The RFP pricing instructions explained that [b]ecause the DTS software will be implemented in a phased approach across DoD, the pricing schedule in this contract allows the Contractor to propose a range of fees within each performance period to ensure adequate and real-time compensation for services provided. RFP, amend. 8, B.4.1.5. Also, offerors were provided the agency's estimated deployment schedule for the DTS at each travel location. Hearing exh. No. 4.

The following pricing model was included in the RFP to evaluate the air/rail transaction fees:

CLIN

Performance Period

Average Across Years

Base Yrs 1&2

Option Yr 1

Option Yr 2

Option Yr 3

OFFICIAL TRAVEL SERVICES -- AIR/RAIL TRANSACTIONS

01

OFFICIAL TRAVEL SERVICES FOR DoD TRAVELERS -- Propose a transaction fee for travel services facilitated through DTS at 0%

02

OFFICIAL TRAVEL SERVICES FOR DoD TRAVELERS -- Propose a transaction fee for travel services facilitated through DTS at 1-25%

03

OFFICIAL TRAVEL SERVICES FOR DoD TRAVELERS -- Propose a transaction fee for travel services facilitated through DTS at 25-50%

04

OFFICIAL TRAVEL SERVICES FOR DoD TRAVELERS -- Propose a transaction fee for travel services facilitated through DTS at 51-75%

05

OFFICIAL TRAVEL SERVICES FOR DoD TRAVELERS -- Propose a transaction fee for travel services facilitated through DTS at 76-90%

06

OFFICIAL TRAVEL SERVICES FOR DoD TRAVELERS -- Propose a transaction fee for travel services facilitated through DTS at 91-100%